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Issue 2 - 2013
Dear All, It is my pleasure to introduce the second edition of India Insights! The theme of this edition of our newsletter is employee health and benets. Organizations around the world are facing the challenges of rising healthcare costs - and India is no different. The demand on employee performance and engagement, and the competition for skilled labor is stronger than ever before. Employers are increasingly searching for innovative ways to manage the health and wellness of their employees to control costs without sacricing employee productivity. A properly structured benets package is important both as a recruitment and as a retention tool. The types of employee benets that are prevalent in India are outlined in the following pages. We also present the highlights from our 7th Annual Employee Health & Benets Study. In this edition we demystify benet costs and analyze the principal cost drivers of employee benets. There has also been signicant activity on the regulatory front with the Insurance Regulatory and Development Authority (IRDA), revamping health insurance regulations. We have endeavored to showcase the principal issues around employee health and benets in the newsletter and hope you nd this a valuable read. Regards, Sanjay Kedia
1850
1866
1907
1938
194
7
19 50
Colonial Era
Nationlisation Era
IRDA Act passed Licences granted to private insurer
20
00
1999
1994
19
72
1968
2002
200 3
20
07
Liberalisation Era
2008
2009
Policy wordings exibility with le and use add-on covers
2012
to date
Minimum 27 non life insurer and rates for 24 life insurer Natural Catastrophe Perils mooted by Ins.Market
Insurance
Retirement Solutions
Accident
Mediclaim
Life
Superannuation
Product
Group Health Insurance
Coverage
Covers hospitalisation, day care procedures & OPD. . Typically covers Employee, Spouse & 2 Children with an option to cover Parents. Median Sum Insured: INR 300,000 Covers disability & medical expenses incurred due to an accident. Median Sum Insured: 3 times CTC Covers death caused by accident or natural causes. Median Sum Insured: 2 times CTC
Prevalence
100%
90%
70%
Marsh India 7th Annual Employee Health & Benets Study Highlights:
Earlier this year, Marsh India published its 7th Annual Employee Health & Benets Study, detailing benets prevalence in India. In the study, we found that 85% of the surveyed organizations have made at least one change to their benets plan design in the last two years to combat rising medical insurance costs. Nearly 28% of employers still continue with a claims ratio in excess of 100%, and 54% of employers stated that health insurance costs will continue to increase by double digits over the next three years. The claim cost per life has risen by 92% in the past ve years, which is an annual average compound medical ination rate of just over 18%. 90% of employers have adopted some form of cost containment measures in their benets plan. In the next three years: 14% are likely to introduce cost containment measures for parental coverage. 11% are likely to relook at room rent restrictions. 7% are likely to introduce ailment caps/sub-limits. 5% are likely to pursue TPAs for package rates/pre-dened taris. 4% are likely to implement a preferred provider network (PPN). An increasing number of employers today (84%) want to provide choice to their employees in the form of exible benets, voluntary top-up plans and keyman insurance. IRDA has made some changes in areas like: Streamlining pre-authorization and claims form, and making it IT and systems driven. Streamlined minimum service level agreements for third party administrators, insurers and service providers. They have specied 11 standardised critical illnesses making them uniform across the industry. The basic exclusions (199 items) have been standardised and communicated. All these guidelines will come in to effect on 1 July 2013.
Insurer New India United India National Oriental ICICI-lombard Bajaj Allianz IFFCO-Tokio HDFC ERGO General Reliance General Tata-AIG Royal Sundaram Cholamandalam Shriram General Future Generali Bharti AXA General Universal Sompo SBI General L&T General Raheja QBE Magma HDI Liberty Videocon
Many global reinsurers like Swiss Re , Munich Re , Hannover Re have representative offie in India ( But not registered reinsurers ) Insurance regulator encourages use of local insurance market capacities before reinsurance outside India Combined Indian Insurance Market Capacity Total Capacity in US Dollars USD 1.27 Billion USD 1.03 Billion USD 55 Million (SumInsuredbasis) USD 125 Million USD 150 Million USD 80 Million USD 176 Million USD 55 Million USD 250 Million
General Insurance Market Trends - Forward Prognosis 10.10 Line of Business General Liability Rate Fluctuation Expected in Q1 2013 Decrease 0% to 10% Increase 10% to 20% Decrease 0% to 10% Increase 10% to 20% Decrease 0% to 10% Stable -5% to +5% Stable -5% to +5% Increase 0% to 10% Decrease 0% to 10% Stable -5% to +5% Motor 41% EB (Health & PA) 25% Fire & Engineering (Property) 14%
Motor 41% Fire & Engineering (Property) 14%
Specialised Institutions:
1.Credit Insurance ECGC 2.Health Insurance Star Health & Allied Insurance Apollo MUNICH Max BUPA 3.Agriculture Insurance AIC Grand Total Reinsurer 1. GIC 1,085 476 99 2,577 59,820 197 87 18 469 10,876 1.59 1.66 1.59 1.91 3.18 1,005 183
Motor / Auto Workers' Compensation / Employers' Liability Property: Catastrophe Exposed Property: Non-Catastrophe Exposed Directors and Officers Liability Professional Liability Marine Cargo Employee Benets: Health Employee Benets: Accident and Health
Note: Minimum prescribed solvency margin by IRDA is 1.5, however the same is relaxed to 1.3 for the year 2012 by IRDA
Aviation 1%
Aviation 1%
Delhi
Ahmedabad
Kolkata
Country Head & CEO Contact : Sanjay Kedia Telephone : +91 (22) 66512900 Fax : +91 (22) 66512901 Head Office Marsh India Insurance Brokers Pvt Ltd, 1201-02, Tower 2, One Indiabulls Centre, Jupiter Mills Compound, 841, Senapati Bapat Marg, Elphinstone Road (W) Mumbai- 400 013 Branch Office Pune Telephone : +91 (20) 40147711 Fax : +91(20) 40147576 Hyderabad Telephone : +91 (40) 44334040 Fax : +91(40) 44334444 Kolkata Telephone : +91 (33) 39845248 Fax : +91(33) 39845212 Contact Details : Editorial Team Sudhish Ramteke (MCS Leader India) sudhish.ramteke@marsh.com (91) 22 66512945 Saurabh Bansal (MCS Knowledge Champion) saurabh.bansal1@marsh.com (91) 22 67499561 Savita Rai (MCS Process Champion) savita.rai@marsh.com (91)22 67499538 Bangalore Telephone : +91 (80) 41857800 Fax : +91(80) 41857801 Chennai Telephone : +91 (44) 43486969 Fax : +91(44) 43486965 Delhi Telephone : +91 (124) 4049200 Fax : +91(124) 4049201 Ahmedabad Telephone : +91 (79) 40040000 Fax : +91(79) 26443177
Mumbai Pune Hyderabad
Bangalore Chennai
The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. Insureds should consult their insurance and legal advisors with respect to individual coverage issues. This document or any portion of the information it contains may not be copied or reproduced in any form without the permission of Marsh India Insurance brokers Pvt Ltd, Copyright 2013 Marsh India Insurance Brokers Pvt Ltd All rights reserved